Operators must act now to capture €14bn private LTE opportunity

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Private LTE could generate substantial revenue for mobile service providers and vendors, according to new analysis from ABI Research.

The research house predicts the private LTE market will be worth $16.3 billion (€14.34 billion) by 2025. Private LTE is tipped to be the foundation for 5G services in vertical markets such as healthcare, transport and logistics, manufacturing, smart venues, smart cities, and oil and gas.

Spectrum considerations in the US are highlighting the scope of private LTE networks globally, yet only Deutsche Telekom (see below) seems to be doing much about it.

Driving private LTE

Pablo Tomasi, Senior Analyst at ABI Research, says that a new understanding of spectrum usage, spearheaded by the Citizens Broadband Radio Service (CBRS) activities in the US, and increasing demand from industry verticals are the main drivers of private LTE.

“The US is taking the lead in bypassing the issue of spectrum, which has traditionally been one of the roadblocks to private LTE expansion,” Tomasi commented.

The CBRS three-tier system provides 150MHz of spectrum so companies can acquire spectrum depending on their needs. As well as CBRS, developments such as MulteFire and countries considering regional spectrum auctions show that “this new spectrum paradigm has a global scale,” Tomasi said.

Transport and logistics is set to be the largest private-LTE vertical, representing 26.3% of the total market. However, according to ABI Research, virtually every sector could benefit from private LTE deployments, mean that an increasing number of companies will be attracted to it.

Where are the service providers?

ABI Research notes that specialised network vendors such as Redline Communications and global vendors like Nokia are already betting on private LTE for growth. Further, companies such as Boingo Wireless and Amazon are also being attracted to the market.

However, the report also finds that, with few notable exceptions such as Deutsche Telekom, mobile operators are hesitant to fully commit to private LTE because they see it as a threat to their core business and investments.

“[Mobile operator] are moving slower than the rest of the market and if they do not start engaging with partners and taking a more central role in the delivering of private LTE solutions, they will miss this opportunity to enter the vertical market space,” ABI Research warns.

The report continues, “A deeper engagement of [mobile service providers] would not only benefit the category but the wider market as a strong commitment from leading carriers will spur the growth of the whole ecosystem.”

Deutsche Telekom is planning to build a public and private LTE network at RWTH Aachen university which will be open to members of Centre Connected

Industry (CCI) to explore innovations in the manufacturing sector.

Working with Ericsson, Deutsche Telekom also recently deployed a public and private LTE network for German lighting manufacturer OSRAM.

Paving the way for 5G

Tomasi concluded, "The importance of Private LTE is not only in its revenue opportunity as the technology also has an additional value.

“The delivering of successful projects will show the reliability of cellular technology (and its ecosystem) and will ultimately pave the way for 5G in industrial markets."